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Hahah... you think there’s an endless supply of yuppies that have an 800+ credit score and can afford a $100-200k down payment? This pent up demand will cycle through, there’s only so many people that can even qualify to buy right now, and if they’re smart, they know better. Meanwhile home construction approaching 2007 levels, rent yield ratios looking a lot like 2006-7 levels. I suspect we are going to get both a deluge of supply and a huge drop in demand. When? Probably next year. Trees don’t grow to the sky.
I really like this guy, and I think his analysis makes perfect sense. He’s talking about things nobody in the press is talking about. He’s in the real estate business too:
Exactly. Recently sold a house which took several attempts. One attempt was an fha approved buyer making about 100K per year give or take. They did something near the final and final credit check because they were knocked out of the running. Apparently they lost 15K in credit doing what ever. Point is it took them out of the running for the house.
Maintaining let alone achieving the income and credit score level is an issue with many. In about 10 years I wouldn't be surprised if the foreclosure rate for houses purchased over the last year or so will have skyrocketed.
Morbidly, I assumed that there would be a major boomer die off with covid. But I agree with you, at some point those homes become sold or simply transferred to their millennial children/grandchildren that were looking for a place to live.
Pretty much that is the only way it can happen for them. With the median income around 50K and the median home cost greater than 300K, you have to have assets, savings or an inheritance to buy a home - or be dual-income.
The days of working and saving a measly portion of your paycheck and then buying a house are over.
Pretty much that is the only way it can happen for them. With the median income around 50K and the median home cost greater than 300K, you have to have assets, savings or an inheritance to buy a home - or be dual-income.
The days of working and saving a measly portion of your paycheck and then buying a house are over.
I didn't buy my first house that way, and that was in 1983. I saved everything I made, practically. I never would have been able to buy a house back then if I had not been so frugal.
There is another whole group of people whose home buying calculus is different from the norm, just for whatever it is worth. And I would be interested to see some stat data on what's been going down with them in recent years, because my connection to that bunch ended in 2015 when I split from my ex, I really have no idea.
Soldiers and vets.
They are the one group that gets zero down payment mortgages with preferential terms. The VA home loan is one of the most awesome benefits of enlistment. And it's an entitlement that you have for life, though you can only have (I believe) one loan at a time. It's how my Dad bought a house not long ago, though. I'd have to see what the stats are on military enlistments, ranks, and retirements are, over the last several years, to know if any shifts among servicemembers have had any effect on housing markets. But they are certainly very agile players and I don't think that they should be overlooked in such a conversation.
And they contribute to rental markets, too. I know a veteran who buys a home with his VA loan, pays it off early, retains it as an investment rental under pro management, rinse/repeat. He owns half a dozen such properties in different states.
But any sort of a Boomer die off won't necessarily translate into lots of newly available housing supply, nor necessarily free houses for heirs. Some of those Boomers have mortgages and such on the houses that the kids won't be able to afford to keep up with or pay off. Some even got reverse mortgages and such. Kids may not even be willing or able to deal with property taxes, depending on the situation. And some more complex inheritance situations will require liquidation for distribution anyways. So there are a lot of Boomer owned homes, that will wind up just being sold, and what I talked about before, big investment firms buying up houses, I don't see that stopping. Maybe someone looking to reside in the house buys it, maybe not.
And of course that's also not taking into account the many older Americans who will have homes sold to support their medical costs when they go into an elder care facility of some kind. Our healthcare system can wipe people out before they die, effectively preventing wealth and property from transferring across generations as much as it otherwise might.
But any sort of a Boomer die off won't necessarily translate into lots of newly available housing supply, nor necessarily free houses for heirs.
So there are a lot of Boomer owned homes, that will wind up just being sold, and...
Sonic_Spork you contradict yourself. You say Boomer die off won't translate into more housing supply and then you state that a lot of Boomer owned homes will end up being sold. Last time I checked when homes are on the market for sale it increases the supply of available homes...
Dead people vacating housing will increase the supply of housing. Right now we have Generations Colliding and bidding for the same homes Millennials first homes and Boomers downsizing to the same affordable homes...
But any sort of a Boomer die off won't necessarily translate into lots of newly available housing supply, nor necessarily free houses for heirs.
So there are a lot of Boomer owned homes, that will wind up just being sold, and...
Sonic_Spork you contradict yourself. You say Boomer die off won't translate into more housing supply and then you state that a lot of Boomer owned homes will end up being sold. Last time I checked when homes are on the market for sale it increases the supply of available homes...
Dead people vacating housing will increase the supply of housing. Right now we have Generations Colliding and bidding for the same homes Millennials first homes and Boomers downsizing to the same affordable homes...
The Boomer die off is already happening. Boomers were born 1946-64. So, in 2020, people aged 57 to 74. We're already losing an ever-increasing number of them:
Around a million of them last year, including about ~200k more than normal because of covid. That has not decreased housing costs one bit. In 25 more years most of them will be gone, the Millennials will be well over 50.
I should have phrased it more specifically that houses that become available for any reason may or may not actually be positioned to be bought by regular "I want to buy a house to live in" type consumers.
My assertion is more that bigger investors are snatching up homes. I've spoken to real estate agents and to people who are in the market, and they cite investors being involved in bidding wars on houses, and more to the point, the clients I deal with at work who used to only manage apartment type communities, are now buying ENTIRE SINGLE FAMILY HOME DEVELOPMENTS and managing them as rentals.
I don't believe that all of a sudden, more Americans are poised to buy a house, or that all of a sudden, so many fewer houses exist in the natural inventory of homes available to be bought or sold by regular people. I believe very strongly that a huge influence on this market, is investment firms looking to acquire property at any cost. And regular folks competing with them.
And I also wonder if homes being foreclosed, being auctioned in estate functions...if they give more advantage to "insiders" like investment firms, compared to Bob and Mary Sue Homebuyer. That was my thought that created the confusion, but I definitely admit I didn't phrase it well. Sorry about that.
Someone upthread (not gonna go hunting for it) mentioned work from home as a reason for people to not be relocating. I think it's the opposite. My company is one that has realized that WFH can actually work, and maybe not every employee needs to be in the office, and they're more open to people becoming permanent remote workers than they were before. This actually has given me the freedom to move and live anywhere. So in some cases, WFH will have an opposite effect of making people more mobile, not less. Also, I AM relocating, and the main reason is to care for an elderly relative (not Boomer though, Silent Gen, not that it matters that much)... We'll have a Gen X professional working from home, supporting a Boomer husband, who will be caring for his Silent Gen father in his last years of life.
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